Finance Act , 1993

PART I Income Tax, Income Levy, Corporation Tax and Capital Gains Tax

Chapter I Income Tax

1 Amendment of provisions relating to exemption from income tax.

1.—As respects the year of assessment 1993-94 and subsequent years of assessment, the Finance Act, 1980, is hereby amended—

(a) in section 1—

(i) by the substitution, in subsection (2) (inserted by the Finance Act, 1989), of “£7,200” and “£3,600”, respectively, for “£7,000” and “£3,500” (inserted by the Finance Act, 1992), and

(ii) by the substitution, in paragraph (a) (inserted by the Finance Act, 1991) of subsection (3) (inserted by the Finance Act, 1989), of “£350” for “£300” in both places where it occurs and of “£550” for “£500”,

and

(b) in section 2, by the substitution, in subsection (6) (inserted by the Finance Act, 1989)—

(i) of “£8,200” and “£9,400”, respectively, for “£8,000” and “£9,200” (inserted by the Finance Act, 1992), in paragraph (a), and

(ii) of “£4,100” and “£4,700”, respectively, for “£4,000” and “£4,600” (inserted by the Finance Act, 1992), in paragraph (b),

and the said subsection (2), and the said paragraph (a) of subsection (3), of the said section 1 and the said subsection (6) of the said section 2, as so amended, are set out in the Table to this section.

TABLE

(2) In this section “the specified amount” means, subject to subsection (3)—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £7,200, and

(b) in any other case, £3,600.

(a) For the purposes of this section and section 2, where a claimant proves that he has living, at any time during the year of assessment, any qualifying child, then, subject to subsection (4), the specified amount (within the meaning of this section or section 2, as the case may be) shall be increased, for that year of assessment, by £350 in respect of the first such child, £350 in respect of the second such child and £550 in respect of each such child in excess of two.

(6) In this section “the specified amount” means, subject to subsection (3) of section 1—

(a) in a case where the individual would, apart from this section, be entitled to a deduction specified in section 138 (a) of the Income Tax Act, 1967, £8,200:

Provided that, if at any time during the year of assessment either the individual or his spouse was of the age of seventy-five years or upwards, “the specified amount” means £9,400, and

(b) in any other case, £4,100:

Provided that, if at any time during the year of assessment the individual was of the age of seventy-five years or upwards, “the specified amount” means £4,700.

2 Alteration of rates of income tax.

2.—(1) Section 2 of the Finance Act, 1991, is hereby amended, as respects the year of assessment 1993-94 and subsequent years of assessment, by the substitution of the following Table for the Table to that section:

“TABLE

Part of taxable income	Rate of tax	Description of rate
(1)	(2)	(3)
The first £7,675	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate
Part of taxable income	Rate of tax	Description of rate
---	---	---
(1)	(2)	(3)
The first £15,350	27 per cent.	the standard rate
The remainder	48 per cent.	the higher rate

”.

(2) Part I of the First Schedule shall have effect for the purpose of supplementing subsection (1).

3 Personal reliefs.

3.—(1) Where a deduction falls to be made from the total income of an individual for the year of assessment 1993-94 or any subsequent year of assessment in respect of relief to which the individual is entitled under a provision mentioned in column (1) of the Table to this subsection and the amount of the deduction would, but for this section, be an amount specified in column (2) of the said Table, the amount of the deduction shall, in lieu of being the amount specified in the said column (2), be the amount specified in column (3) of the said Table opposite the mention of the amount in the said column (2).

TABLE

Statutory provision	Amount to be deducted from total income for the year 1992-93	Amount to be deducted from total income for the year 1993-94 and subsequent years
(1)	(2)	(3)
	£	£
Income Tax Act, 1967:
section 138
(married man)	4,200	4,350
(widowed person bereaved in the year of assessment)	4,200	4,350
(widowed person)	2,600	2,675
(single person)	2,100	2,175
section 138A
(additional allowance for widows and others in respect of children)
(widowed person)	1,600	1,675
(others)	2,100	2,175

(2) Section 3 of the Finance Act, 1991, shall have effect subject to the provisions of this section.

(3) Part II of the First Schedule shall have effect for the purpose of supplementing subsection (1).

4 Amendment of section 6 (special allowance in respect of P.R.S.I. for 1982-83) of Finance Act, 1982.

4.—Section 6 of the Finance Act, 1982, shall have effect for the purpose of ascertaining the amount of income on which an individual referred to therein is to be charged to income tax for the year 1993-94, as if in subsection (2)—

(a) “1993-94” were substituted for “1982-83”, and

(b) “£286” were substituted for “£312” in each place where it occurs.

5 Amendment of provisions relating to relief in respect of interest.

5.—(1) In this section “the principal sections” means sections 76 (1) and 496 of, and paragraph 1 (2) of Part III of Schedule 6 to, the Income Tax Act, 1967.

(2) Section 496 of the Income Tax Act, 1967, is hereby amended, as respects the year 1993-94 and subsequent years of assessment, by the substitution of the following subsection for subsection (2A) (inserted by the Finance Act, 1980):

“(2A) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and notwithstanding the provisions of subsection (1), no repayment of tax shall be made under this section for any year of assessment—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194, on the excess of the interest over £5,000,

(b) in the case of a widowed person, on the excess of the interest over £3,600, or

(c) in any other case, on the excess of the interest over £2,500.”.

(3) Section 7 of the Finance Act, 1989, shall not apply or have effect in relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, and ending on or before the 5th day of April, 1994.

(4) As respects the year of assessment 1993-94 and subsequent years of assessment, section 6 of the Finance Act, 1987, shall not apply or have effect for the first three years of assessment for which relief falls to be given under the principal sections in respect of one or more than one qualifying loan (within the meaning of section 21 of the Finance Act, 1982):

Provided that for the purposes of calculating the additional relief, if any, which but for the enactment of this subsection would not have been given for a year of assessment, any relief given in accordance with the principal sections in the case of a person who has elected or could be deemed to have duly elected to be assessed to tax in accordance with the provisions of section 194 of the Income Tax Act, 1967, for any year of assessment shall, notwithstanding any other provision of the Tax Acts, be treated as given equally to the person and that person's spouse for such year of assessment notwithstanding that—

(a) section 197 of the Income Tax Act, 1967, may have applied for that year of assessment, and

(b) the payments in respect of which relief is given may not have been made in such proportions.

(5) In relation to any interest paid in respect of any period beginning on or after the 6th day of April, 1993, relief which falls to be granted under the principal sections shall, notwithstanding the foregoing provisions of this section, be reduced—

(a) in the case of a person who is assessed to tax for the year of assessment in accordance with the provisions of section 194 of the Income Tax Act, 1967, by £200 or, if less, the amount of interest paid, or

(b) in any other case, by £100 or, if less, the amount of interest paid.

6 Amendment of section 11 (restriction of relief to individuals on loans applied in acquiring shares in companies) of Finance Act, 1990.

6.—Section 11 of the Finance Act, 1990, is hereby amended by the substitution of the following section for section 11:

“11.—Notwithstanding the provisions of section 34 of the Finance Act, 1974, and section 8 of the Finance Act, 1978, relief shall not be given under the said section 34 or the said section 8 in respect of any payment of interest on any loan applied in acquiring shares issued—

(a) on or after the 20th day of April, 1990 (being shares forming part of the ordinary share capital of a company) if a claim for relief under Chapter III of Part I of the Finance Act, 1984, is made in respect of the amount subscribed for those shares, or

(b) on or after the 6th day of May, 1993 (being shares forming part of the ordinary share capital of a company) if a claim for relief under section 35 (as amended by the Finance Act, 1993) of the Finance Act, 1987, is made in respect of the amount subscribed for those shares.”.

7 Tax treatment of certain severance payments.

7.—(1) Section 115 of the Income Tax Act, 1967, is hereby amended by the insertion of the following subsection after subsection (1):

“(1A) (a) Paragraph (d) of subsection (1) shall not apply to the following payments, that is to say—

(i) a termination allowance payable in accordance with the provisions of section 5 of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992, and any regulations made thereunder,

(ii) a severance allowance or a special allowance payable in accordance with the provisions of Part V (inserted by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992) of the Ministerial and Parliamentary Offices Act, 1938, or

(iii) a special severance gratuity payable under section 7 of the Superannuation and Pensions Act, 1963, or any analogous payment payable under or by virtue of any other enactment.

(b) (i) Subparagraphs (i) and (ii) of paragraph (a) shall apply and have effect in relation to payments made on or after the 1st day of November, 1992.

(ii) Subparagraph (iii) of paragraph (a) shall apply and have effect in relation to payments made on or after the 6th day of May, 1993.”.

(2) (a) This subsection applies to the following payments, that is to say—

(i) a termination allowance (other than that part of the allowance which comprises a lump sum) payable in accordance with the provisions of section 5 of the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992, and any regulations made thereunder, and

(ii) a severance allowance or a special allowance payable in accordance with the provisions of Part V (inserted by the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act, 1992) of the Ministerial and Parliamentary Offices Act, 1938.

(b) Notwithstanding any other provision of the Income Tax Acts, payments to which this subsection applies, made on or after the 1st day of November, 1992, shall be deemed to be—

(i) profits or gains accruing from an office or employment and, accordingly—

(I) tax under Schedule E shall be charged thereon, and

(II) the tax so chargeable shall be computed under section 110 (1) (inserted by the Finance Act, 1991) of the Income Tax Act, 1967,

and

(ii) emoluments to which the provisions of Chapter IV of Part V of the Income Tax Act, 1967, are applied by section 125 of that Act.

8 Reliefs in respect of tax charged on payments on retirement, etc.

8.—As respects payments made on or after the 6th day of May, 1993, the Income Tax Act, 1967, is hereby amended—

(a) in section 115 (as amended by section 7)—

(i) by the substitution in subsection (3) (including the proviso thereto) of—

(I) “not exceeding the basic exemption” for “not exceeding £6,000”,

(II) “the amount of the said basic exemption” for “the said sum of £6,000”, and

(III) “the amount of the said basic exemption” for “the said sum”,

and

(ii) by the insertion of the following subsection after subsection (5):

“(5A) In this section and in Schedule 3 ‘the basic exemption’ means £6,000 together with £500 for each complete year of the service, up to the relevant date, of the holder in the office or employment in respect of which the payment is made.”,

and

(b) in Schedule 3—

(i) by the substitution in paragraph 3 of “the basic exemption” for “£6,000”,

(ii) by the substitution in subparagraph (b) of paragraph 4 of “one-fifteenth” for “one-twentieth”, and

(iii) by the substitution in the second proviso to paragraph 6 of “the basic exemption” for “£6,000” in both places where it occurs.

Chapter II Income Levy

9 Application of section 16 (income levy) of Finance Act, 1983, for 1993-94.

9.—(1) In this section “contribution year” means a year of assessment within the meaning of the Income Tax Acts.

(2) The provisions of section 16 (as amended by the Finance Act, 1984) of the Finance Act, 1983, shall apply and have effect for the contribution year 1993-94, as they applied and had effect for the contribution year 1984-85, as if—

(a) the following paragraph were substituted for paragraph (b) (inserted by the Finance Act, 1984) of subsection (2):

“(b) the Youth Employment Levy Regulations, 1982 (S.I. No. 84 of 1982), the Youth Employment Levy (Amendment) Regulations, 1983 (S.I. No. 52 of 1983), the Youth Employment Levy (Amendment) Regulations, 1984 (S.I. No. 75 of 1984), the Employment and Training Levy (Amendment) Regulations, 1988 (S.I. No. 53 of 1988), and the Employment and Training Levy (Amendment) Regulations, 1989 (S.I. No. 69 of 1989) (referred to in this subsection as ‘the Regulations’),”,

(b) the following paragraph were inserted after paragraph (i) of subsection (2):

“(ia) in section 16 of the Act, paragraphs (c) and (d) shall be deleted and the following paragraph shall be substituted for paragraph (a):

‘(a) where in a contribution year a payment is made to or for the benefit of the employed contributor in respect of reckonable earnings of that employed contributor, levy shall be payable by the employed contributor at the rate of 1 per cent, of the amount of the reckonable earnings to which such payment relates:

Provided that levy payable pursuant to this section shall not be payable by an employed contributor who, by virtue of section 45 of the Act of 1970, has full eligibility for services under Part IV of that Act,’.”,

(c) in paragraph (v) (inserted by the Finance Act, 1984) of subsection (2), “the year 1993-94” were substituted for “the year 1983-84 or the year 1984-85”,

(d) in the proviso (inserted by the Finance Act, 1984), “£173” and “£9,000” were substituted for “£96” and “£5,000”, respectively, and “1993-94” were substituted for “1984-85” in both places where it occurs, and

(e) the following additional proviso were inserted after the proviso (inserted by the Finance Act, 1984):

“Provided also that—

(a) where an individual proves to the satisfaction of the Revenue Commissioners that his reckonable income for the contribution year 1993-94 did not exceed £9,000 any levy deducted from emoluments forming part of that reckonable income shall be repaid to that individual and for the purposes of such repayment the levy shall be deemed to be income tax:

(b) where income levy is payable for the contribution year 1993-94 in respect of reckonable income other than emoluments, the provisions of section 18 (3) (b) (ii) of the Finance Act, 1988 (as applied for the purposes of income levy by virtue of Regulation 16 (inserted by the Employment and Training Levy (Amendment) Regulations, 1988) of the Youth Employment Levy Regulations, 1982), shall apply and have effect as if, in accordance with the provisions of this section, income levy had been payable for the contribution year 1992-93.”.

Chapter III Taxation of Married Persons

10 Taxation of married persons.

10.—(1) As respects the year of assessment 1994-95 and subsequent years of assessment, the Income Tax Act, 1967, is hereby amended, in Chapter I of Part IX, by the insertion of the following sections after section 195A (inserted by the Finance Act, 1983):

“Assessment on either spouse.

195B.—(1) In this section—

‘the basis year’, in relation to a husband and wife, means the year of marriage or, if earlier, the latest year of assessment preceding that year of marriage for which details of the total incomes of both the husband and the wife are available to the inspector at the time they first elect, or are first deemed to have duly elected, to be assessed to tax in accordance with the provisions of section 194;

‘year of marriage’ has the same meaning as it has in section 195A (inserted by the Finance Act, 1983).

(2) Subsection (3) shall apply for a year of assessment where, in the case of a husband and wife who are living together—

(a) (i) an election (including an election deemed to have been duly made) by the husband and wife to be assessed to tax in accordance with the provisions of section 194 has effect in relation to that year of assessment, and

(ii) the husband and the wife by notice in writing jointly given to the inspector before the 6th day of July in that year of assessment elect that the wife should be assessed to tax in accordance with the provisions of section 194,

or

(b) (i) the year of marriage is the year 1993-94 or a subsequent year of assessment, and